Ohio utility regulators reject AEP rate increases

COLUMBUS, Ohio (AP) -- Ohio's public utility regulators on Thursday rejected electric rate increases criticized by schools and small businesses as burdensome at a time of a weak economy and continued budget cuts.

The decision by the Public Utilities Commission of Ohio on Thursday followed weeks of comments opposing the increases approved in December for customers of Columbus-based American Electric Power.

The commission ordered AEP to return its rates to levels similar to those in place in December when the commission first approved them. These rates will remain in place until a new rate plan is adopted.

"Our decision effectively hits the reset button on AEP's electric security plan, allows us to start over from the beginning, ensure that we have a complete picture of any proposal, and balance the interests of all customers and the utility," said commission chairman Todd Snitchler.

He warned that despite the vote, the panel remains committed to moving to a competitive electric rate market.

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A message was left with AEP, which had also expressed concern in recent weeks about the impact of the rate increase on businesses.

The commission in a statement acknowledged that small businesses and residential customers were negatively affected by the order approved in December. Bills for certain customers significantly exceeded what was expected based on the record in the case, the commission said.

Plastic Packaging Technologies of Columbus, for example, complained about a $28,000 increase in its yearly electric bills that might jeopardize a planned expansion.

Three of the state's largest school groups on Tuesday asked the commission to give districts special consideration as they reconsidered the rate increase. They said the rate hikes, coming in the middle of the school year, could lead to layoffs and program cuts.

The commission in December approved a $300 million base-rate increase for AEP to generate electricity, about half of what the Columbus-based company had asked for. The changes, affecting all customers including businesses, took effect in January.

AEP's residential rates in Ohio went up by as much as 5 percent following the rate increase approval.